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STEP 4: Contact potential sponsors
5.3 Risk management process
To make risk management easier, the risk management process is broken down into four steps that should be taken:
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5.3.1 Identify the risks of the sport in your club
Identifying the loss exposures in a particular sport club means determining which exposures will undermine the club’s goals. Essentially, loss exposures can be placed in four categories, namely:
¾ Property loss
¾ Liability loss
¾ Personnel loss
¾ Net income loss
53 Property loss
Property loss exposure arises out of the possibility of damage, destruction, or disappearance of property resulting from a peril or cause of loss. Examples of losses would be:
¾ Unimproved land
¾ Buildings
¾ Tangible personal property ο Money
ο Inventory
ο Computer and media equipment ο Valuable records and papers ο Furniture
ο Supplies
ο Mobile property
ο Intangible personal property Patents ο Trademarks
ο Copyrights ο Goodwill ο Trade secrets
¾ Legal interests in property ο Owner’s interest
ο Buyer’s and seller’s interest ο Landlord or tenant’s interest Liability loss
Liability loss exposures results from a club having a legal responsibility to pay a claim for bodily injury or property damage sustained by another party. These loss exposures arise out of:
¾ Torts
ο Negligence ο Intentional torts ο Strict liability torts
¾ Contracts
ο Breach of contract
¾ Statutes
ο Such as workers compensation
54 Personnel loss
A personnel loss exposure occurs when an employee, manager, or owner with special knowledge or skill retires, resigns, or dies.
Net income loss
Net income loss arises when some circumstance affecting the club causes reduction of net income, which could occur as a result of property, liability, or personnel loss exposures. This could happen in poor economic times when revenues are down.
Reduction of loss exposures cannot be accomplished if they are not identified. Sometimes identification of loss exposures is simple and obvious, but even those circumstances lead to a multitude of lawsuits.
For each loss exposure described above, a club’s risk management team will have to make a complete assessment.
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55 5.3.2 Evaluate and analyze the risks
Once risks have been identified, those risks should be analyzed. A common means of analysis is the risk matrixes that analyze risk exposures based on severity vs frequency. Such charts provide guidance for classifying risks as severe, moderate or slight in severity, as well as slight, moderate, or definite as to frequency. In situations in which loss severity is slight to significant and loss frequency is slight to moderate, it may be reasonable to take actions to reduce or prevent the losses from occurring. For example, at your sport club’s facility, slips and falls are common occurrences that vary in severity. These may deserve more risk management attention than the possibility of a large fire, and the club would likely put more resources into slip and fall reduction and prevention.
5.3.3 Examine possible risk control techniques Risk control techniques include the following:
¾ Avoidance technique
ο This means a club decides to stop a particular activity or not start it in the first place ο Example, a primary school decides not to present tackle rugby for boys under the age
of 12, but only tag rugby.
¾ Loss prevention techniques
ο This technique implements measures to reduce the frequency of loss
ο Example, the club may prohibit any spectators at a hockey match to stand behind the goal boxes, to decrease the number of spectators hit by hockey balls.
¾ Loss reduction technique
ο Loss reduction is a loss control technique that is designed to decrease loss severity ο Example, rugby players wearing padding, they may still injure themselves when being
tackled, but this protection will reduce the severity of injuries.
¾ Duplication
ο Duplication means having spare parts or equipment so you can continue business as usual if a loss occurs.
¾ Separation
ο Separation means dispersing assets or activities so that if, for example, a natural disaster occurs, it will not wipe out all of the club’s assets or activities
5.3.4 Implement risk control techniques
After identifying risks in your club, assessing them, and examined possible risk control techniques, you now need to implement those techniques. Someone has to take charge in implementing the techniques, and this could be the coach, club manager, or owner. The person in charge puts safety first – above winning or profits. For example, lightning is imminent and only 15 minutes of the rugby game remains. The score is tied, and the spectators are excited. The sport club manager has to make a decision to stop the match or to risk playing on with the potential lightning, which has been known to strike the rugby club before.
56 Implementing loss prevention and reduction techniques
The following are means of implementing loss prevention and reduction techniques:
¾ Facility inspection
ο Inspections can take place at regular intervals, such as daily or weekly, or they can take place before, during, and after practices or events
ο Example, before a rugby game or practice begins; the field should be inspected for holes, dangerous objects, or defects.
ο Documentation of each inspection is important in the event a lawsuit is filed
¾ Facility cleaning, maintenance, and repair
ο Each area of the facility should have a documented cleaning and maintenance schedule ο Regular inspections should reveal additional cleaning, repair, and maintenance
ο The facility should be monitored at all times for slipping and tripping hazards ο Maintenance should take place on a regularly scheduled basis
ο Repairs should be made promptly
ο If an item is found to be in disrepair, it should be taken out of service immediately ο If it cannot be stored, a sign should be displayed warning that it is out of service and
should not be used
¾ Crowd management
ο If your club hosts events in which large crowds gather, an important part of risk control is establishing and implementing a crowd management plan
ο The following elements should be present in a crowd management plan:
Competent staff trained in crowd management
Emergency and disaster planning and implementation
Procedures to eject unruly, intoxicated, or disruptive spectators
Use of signage to promote crowd management
¾ Protective gear
ο A sport club may wish to require and enforce use of certain protective gear as part of its implementation of loss prevention and reduction techniques
ο The use of mouth guards, shin guards, helmets, and protective padding will reduce the frequency of injuries and their severity
¾ Equipment
ο Equipment should be regularly inspected and tested to determine if it is still working properly ο Maintenance should be done regularly as appropriate to all equipment
ο After each use, equipment should be cleaned in accordance to the manufacturer’s recommendations
ο When using equipment, the manufacturer’s recommendations regarding use, maintenance, and repair should be followed
ο Documentation of cleaning, repair, and maintenance of equipment is important if a lawsuit ever arises over equipment that causes injury
57